Bitcoin and crypto prices are trending lower, following US stocks lower after their biggest loss since June 2020.
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The bitcoin price has once again fallen below the closely watched $30,000 per bitcoin level, a nearly 5% drop in the last 25 hours. Other top ten cryptocurrencies, including ethereum, BNB, XRP, solana, cardano avalanche, dogecoin and polkadot, have seen steeper declines, with rivals to ethereum losing around 10%.
As bitcoin and crypto traders come to terms with the huge price drop that has wiped $1 trillion from the combined crypto market since April, fears are mounting that more pain could be on the way if the stock market contagion spreads. .
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“The market clearly remains in a state of fear, caused by the decoupling of [collapsed stablecoin] UST, as well as fears of the spread to the broader financial markets,” Sam Kopelman, UK manager of bitcoin and crypto exchange Luno, said by email.
On Wednesday, all major US markets fell sharply, with the S&P closing down 4%, its biggest drop since June 2020, and the tech-heavy Nasdaq shedding 4.7%. In recent weeks, crypto market watchers have highlighted bitcoin’s proximity to the stock market, with Federal Reserve interest rate hikes and balance sheet trimming putting pressure on investors across the board.
“The current fear in the crypto markets is pushing capital that was previously invested in altcoins into bitcoin, a mark of the currency’s relative strength compared to others,” Kopelman added.
Ethereum, its biggest rivals solana, cardano, avalanche and polkadot, as well as meme-based dogecoin and Ripple’s XRP, have all declined at a faster rate than bitcoin in recent weeks.
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“[The] panic selling in the markets and persistent investor anxiety foreshadows the approach of a spike in panic,” Alex Kuptsikevich, senior market analyst at FxPro, wrote in emailed comments, adding that the price of bitcoin could fall as low as $20,000 if the cryptocurrency slump continues.
“Overall negative market sentiment has prevented the bulls from coming out in full force. So far, it is not easy to see reliable signs of overselling or bounce formation. We should be ready for the crypto market to test support at lows. from last week. again in the short term. We consider the area near $20,000 to be the ultimate target for a potential sell-off, which corresponds to bitcoin’s long-term support line.”